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Mt. Hood Real Estate Sales for January 2021

by Liz Warren

January 2021 had a huge amount of sales closing on Mt. Hood. Nineteen properties closed for the month! Considering there are only five properties even for sale today, this is an amazing amount to close for the start of the year. It'll be interesting if the inventory doesn't pick up soon. Most veteran agents have never seen anything like this before.  Eight of the mountain sales were over $500,000!

Here are the sales for January:

Mt. Hood real estate sales for January 2021

Mt. Hood Real Estate January 2021

Mt. Hood Real Estate sales January 2021

Mt. Hood real estate sales January 2021

Happy Valentines Day

by Liz Warren

We're Not in a Housing Bubble on Mt. Hood

by Liz Warren

3 Reasons We’re Definitely Not in a Housing Bubble on Mt. Hood

3 Reasons We’re Definitely Not in a Housing Bubble | MyKCM
 

Home values appreciated by about ten percent in 2020, and they’re forecast to appreciate by about five percent this year. This has some voicing concern that we may be in another housing bubble like the one we experienced a little over a decade ago. Here are three reasons why this market is totally different.

1. This time, housing supply is extremely limited

The price of any market item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase.

In real estate, supply and demand are measured in “months’ supply of inventory,” which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about 6 months. Anything above that defines a buyers’ market, indicating prices will soften. Anything below that defines a sellers’ market in which prices normally appreciate.

Between 2006 and 2008, the months’ supply of inventory increased from just over 5 months to 11 months. The months’ supply was over 7 months in twenty-seven of those thirty-six months, yet home values continued to rise.

Months’ inventory has been under 5 months for the last 3 years, under 4 for thirteen of the last fourteen months, under 3 for the last six months, and currently stands at 1.9 months – a historic low.

Remember, if supply is low and demand is high, prices naturally increase.

2. This time, housing demand is real

During the housing boom in the mid-2000s, there was what Robert Schiller, a fellow at the Yale School of Management's International Center for Finance, called “irrational exuberance.” The definition of the term is, “unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.” Without considering historic market trends, people got caught up in the frenzy and bought houses based on an unrealistic belief that housing values would continue to escalate.

The mortgage industry fed into this craziness by making mortgage money available to just about anyone, as shown in the Mortgage Credit Availability Index (MCAI) published by the Mortgage Bankers Association. The higher the index, the easier it is to get a mortgage; the lower the index, the more difficult it is to obtain one. Prior to the housing boom, the index stood just below 400. In 2006, the index hit an all-time high of over 868. Again, just about anyone could get a mortgage. Today, the index stands at 122.5, which is well below even the pre-boom level.

In the current real estate market, demand is real, not fabricated. Millennials, the largest generation in the country, have come of age to marry and have children, which are two major drivers for homeownership. The health crisis is also challenging every household to redefine the meaning of “home” and to re-evaluate whether their current home meets that new definition. This desire to own, coupled with historically low mortgage rates, makes purchasing a home today a strong, sound financial decision. Therefore, today’s demand is very real.

Remember, if supply is low and demand is high, prices naturally increase.

3. This time, households have plenty of equity

Again, during the housing boom, it wasn’t just purchasers who got caught up in the frenzy. Existing homeowners started using their homes like ATM machines. There was a wave of cash-out refinances, which enabled homeowners to leverage the equity in their homes. From 2005 through 2007, Americans pulled out $824 billion dollars in equity. That left many homeowners with little or no equity in their homes at a critical time. As prices began to drop, some homeowners found themselves in a negative equity situation where the mortgage was higher than the value of their home. Many defaulted on their payments, which led to an avalanche of foreclosures.

Today, the banks and the American people have shown they learned a valuable lesson from the housing crisis a little over a decade ago. Cash-out refinance volume over the last three years was less than a third of what it was compared to the 3 years leading up to the crash.

This conservative approach has created levels of equity never seen before. According to Census Bureau data, over 38% of owner-occupied housing units are owned ‘free and clear’ (without any mortgage). Also, ATTOM Data Solutions just released their fourth quarter 2020 U.S. Home Equity Report, which revealed:

“17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value…The count of equity-rich properties in the fourth quarter of 2020 represented 30.2 percent, or about one in three, of the 59 million mortgaged homes in the United States.”

If we combine the 38% of homes that are owned free and clear with the 18.7% of all homes that have at least 50% equity (30.2% of the remaining 62% with a mortgage), we realize that 56.7% of all homes in this country have a minimum of 50% equity. That’s significantly better than the equity situation in 2008.

Bottom Line

This time, housing supply is at a historic low. Demand is real and rightly motivated. Even if there were to be a drop in prices, homeowners have enough equity to be able to weather a dip in home values. This is nothing like 2008. In fact, it’s the exact opposite.

Mt. Hood Land Swap

by Liz Warren

The Mt. Hood land swap is back in the news! Negotiations between the U.S. Forest Service with land next to Government Camp and Mt. Hood Meadows owned Cooper Spur ski area continues. Two decades later it is back in the news with a final decision on the environmental impact by the Feds and a draft decision of terms. 

This recent article in the Oregonian gives a good background on the history of the swap along with past and future challenges of the appraised values of the parcels.

If you would like to read the draft of the final decision the 40 page document is HERE.

Map of swap area

Government Camp Land Swap

 

What's the Truth About Downpayments To Buy Your Mt. Hood Home?

by Liz Warren

          

Appraisals Vs. Home Inspections on Mt. Hood

by Liz Warren

What’s the Difference between an Appraisal and a Home Inspection?

What’s the Difference between an Appraisal and a Home Inspection? | MyKCM
 

If you’re planning to buy a home, an appraisal is an important step in the process. It’s a professional evaluation of the market value of the home you’d like to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home prior to lending a buyer money for the purchase. It’s also a different step in the process from a home inspection, which assesses the condition of the home before you finalize the transaction. Here’s the breakdown of each one and why they’re both important when buying a home.

Home Appraisal

The National Association of Realtors (NAR) explains:

“A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised! An appraiser will observe the property, analyze the data, and report their findings to their client. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender’s decision to provide funds for a mortgage.”

When you apply for a mortgage, an unbiased appraisal (which is required by the lender) is the best way to confirm the value of the home based on the sale price. Regardless of what you’re willing to pay for a house, if you’ll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn’t loan you more than what the home is worth.

This is especially critical in today’s sellers’ market where low inventory is driving an increase in bidding wars, which can push home prices upward. When sellers are in a strong position like this, they tend to believe they can set whatever price they want for their house under the assumption that competing buyers will be willing to pay more.

However, the lender will only allow the buyer to borrow based on the value of the home. This is what helps keep home prices in check. If there’s ever any confusion or discrepancy between the appraisal and the sale price, your trusted real estate professional will help you navigate any additional negotiations in the buying process.

Home Inspection

Here’s the key difference between an appraisal and an inspection. MSN explains:

In simplest terms, a home appraisal determines the value of a home, while a home inspection determines the condition of a home.”

The home inspection is a way to determine the current state, safety, and condition of the home before you finalize the sale. If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you as a buyer have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. Your real estate agent is a key expert to help you through this part of the process.

Bottom Line

The appraisal and the inspection are critical steps when buying a home, and you don’t need to manage them by yourself. Let’s connect today so you have the expert guidance you need to navigate through the entire home buying process.

New Zig Zag Riverfront Cabin on Mt. Hood One Bedroom

by Liz Warren

There's FINALLY a new cabin on the market near Rhododendron in the Mt. Hood National Forest. It's in great condition with a newer septic system and riverside deck! This charmer has everything you could want for your Mt. Hood getaway. The open floor plan has tons of wood and log accents! A stone fireplace features a wood stove that will easily heat the entire cabin. Wood floors.   $209,600

Mt. Hood Cabin on the Zig Zag River

Cozy Fireplace in the Mt. Hood National Forest near Rhododendron

 

 

Its Time to Sell on Mt. Hood!––

by Liz Warren

Is Right Now the Right Time to Sell? [INFOGRAPHIC]

Is Right Now the Right Time to Sell? [INFOGRAPHIC] | MyKCM
 

Some Highlights

  • If you’re on the fence about selling your house, now is a great time to take advantage of sky-high demand, low supply, and fierce buyer competition.
  • With buyer demand rising and historically low inventory for sale, if you’re in a position to move, your house may really stand out from the crowd.
  • Let’s connect today to get your homebuying process underway.

3 Reality TV Myths Busted

by Liz Warren

Mt. Hood National Forest Storm Damage

by Liz Warren

Here's the latest information for Mt. Hood National Forest Cabin owners concerning our recent wind and rain storm:

Summer Recreation Residences

January 12- 13 Storm Damage Alert

Due to the wind and rainstorm, there are many downed trees and downed power lines in the recreation residence tract.  PGE and forest employees are working on clearing roads, prioritizing those who are trapped behind storm debris. This work will take several days.  In the meantime: 

  • Please postpone a visit to cabins.  There are many safety hazards in the area, including downed power lines.
  • First responders and work crews are out working and making progress- it is very important to not impede their work or block roads. 
  • Road 12 (Still Creek Rd.) is blocked and requires heavy equipment to remove a giant downed tree.
  • The Zigzag Ranger District and many of its employees are without internet, phones, and/or power.  
  • As staff gets safe road access they will assess recreation residences for damage and notify owners of discovered damage.

Displaying blog entries 431-440 of 1876

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